After KHA's collaboration with hospitals and the Department for Medicaid Services (DMS) to modernize the DSH payment program, KHA members subsequently identified concerns once they had an opportunity to review the Department's proposed changes to the regulation. Some changes simply need clarification while others are not in keeping with the prior agreement on how the DSH program will operate.

The new regulation allows the DMS to adjust a hospital's total uncompensated care costs reported on the hospital's base year Medicaid DSH survey used to make the initial DSH payment. This gives very broad authority to allow the Department to adjust a hospital's total uncompensated care costs "if the amount reported appears likely to result in a substantial redistribution of DSH funds that could have been avoided by adjusting the hospital's total uncompensated care costs." KHA suggested this section should be deleted.

Two sections of the proposed rule would permit the department to withhold future payments to collect a DSH overpayment. KHA suggested amending the regulation to clarify that the withholding of future payments refers to regular Medicaid claim payments.

Language in the new rule suggests severe penalties for hospitals that submit an updated survey even one day late even if there were no changes to their original survey. KHA recommended that this section be deleted.

To view the comments in their entirety, please visit the Policy page of the KHA website. You must log in to view this page. Your user name is your email address and your password can be reset via the website if needed.

If you have any questions about the comments, please contact Nancy Galvagni at KHA (ngalvagni@kyha.com).